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The Value of First-Class Design

May 1, 2010 12:00 PM, By Michael Eby, Editor-in-Chief

Examining the future for EC&M’s top 40 electrical design firms

Our cover story this month, starting on page 18, focuses on the giants in the electrical design world — powerful firms that typically work on large, high-profile projects around the country. Our annual Top 40 survey and follow-up report allow us to provide you with an inside look at the firms' most recent financial performance indicators and offer a glimpse of their future growth plans. As expected, their financial performance as a group in 2009 did not call for celebration, as delayed and canceled projects continued to pile up. Here's a snapshot of the numbers:

• 19 of the 31 firms on last year's list suffered year-over-year revenue decreases (12 of the 19 saw double-digit declines).

• 18 of 38 firms responding to a revenue expectation question admitted they did not meet their goal in 2009.

• Approximately 54% of the firms reported a decrease in the number of employees on the payroll from the prior year.

• 65.8% of the firms anticipate the American Recovery and Reinvestment Act to have little or no effect on their workload moving forward.

Despite the lack of projects in the market these past few years, a couple of firms managed to maintain steady revenue streams while a few others posted single-digit growth rates. This isn't all that bad, considering how depressed most markets have been lately. How did they do it? Some grew through acquisition, which allowed them to extend their geographic presence. Others expanded, which allowed them to delve into new markets. A few others benefited from established relationships in the electric utility market — where investment and expansion funds are still flowing strong.

Where will these firms focus their efforts next? I'm confident many of them are closely tracking the development of new photovoltaic cells and systems, fuel cell technology, AC and DC superconducting cables, and LEDs. They're also positioning themselves to take advantage of new market opportunities that center around the rebirth of nuclear power plants, widespread expansion of a new Smart Grid, and development of a new electric vehicle infrastructure.

Despite the economic challenges of the past year, one thing is certain: Going forward, successful design firms must stay at the forefront of business and technology trends in order to remain key players in the markets they serve. In our world, this means they better be out there preaching the virtues of environmental stewardship and renewable technologies — working with customers to better manage their existing assets, reduce their energy consumption levels, invest in alternative energy sources, and realize the value of sustainable design. As the push for net-zero energy building projects continues to gain momentum, so does the value of a design firm that offers the expertise to fulfill this goal.

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© 2012 Penton Business Media, Inc.

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